Don't you just hate that? It happens to be one of my major pet peeves. And a few too many of the folks around here like to do that.

Once again there's the attempt to frame what I said as somehow being about the mere fact that you have or express a different view. Wouldn't that be fun to debate instead? Why, that would be so easy to knock out of the park, wouldn't it?

Three strikes, you're now being obtuse. Go back and reread, this time applying whatever comprehension and critical thinking skills you have to what I actually wrote. (Hint: part of it starts with "There's nothing wrong with contrary opinions...")

This guy (the OP) reminds me of all the people in the runup to the 2008 election just insisting that the economy was all sunshine and lollipops, and we who were throwing red flags everywhere were the loonies trying to get the system down lol

I suspect that by May-June of 2013 intense inflationary pressure will be too heavy to hide or 'explain away' anymore.

I can't disagree with this strongly enough. I suspect that at some point the Student Loan Bubble will burst or at least begin to deflate, which could very well usher in a new, though less extreme, Great Recession. And even if that does not happen, there's a very real possibility that we could be in for a bit of a deflationary spell, similar to what we experienced during the Great Recession when consumers pulled back, some debts were written-off, and credit dried up - particularly if tax rates rise.

Don't you just hate that? It happens to be one of my major pet peeves. And a few too many of the folks around here like to do that.

This guy (the OP) reminds me of all the people in the runup to the 2008 election just insisting that the economy was all sunshine and lollipops, and we who were throwing red flags everywhere were the loonies trying to get the system down lol

You know, Gunny, it's really beneath you to trash the poster rather than his position. There are indeed green shoots in the economy. The demand for temporary workers is rising - that's a leading indicator I've been looking for. I think that OT will rise next.

Some of his cheerleading is over the top, but the underlying arguments seem solid and documented.

I don't understand how this can be sustained, but they've sustained it all these years so there's no reason for me to necessarily believe that this is the end. Heck, I thought the 2008 crash was the beginning of the end. I can't believe that hyper-inflation hasn't smacked us hard, yet. But it hasn't, so maybe it won't.

Last edited by angelatc; 12-08-2012 at 01:09 PM.

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"Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won."

In the third quarter, total household liabilities were 112.7 percent of after-tax income during the third quarter, the lowest since 2003 and down from 113.4 percent in the second quarter.

Economists are divided over how much further households have to go in this deleveraging process. Further debt reduction would leave less money for spending, slowing the wider economy.

While total debt as a share of income remains historically high, one measure kept by the Fed has shown that monthly debt payments as a share of income in the second quarter were at the lowest since 1993.

wouldn't even surprise me if he was only referring to total consumer debt, as if that would ever lower if population doesn't decrease.

He was referring to total consumer debt as in consumer debt only. Really, the amount of debt you carry isn't a big deal unless you don't have the income to back it up. Luckily, Americans do have the income to back it up, as evidenced by the fact that the American consumer carries a debt burden the least costly to them since 1993. Interestingly, I don't remember the years following 1993 to be very bad times for the United States.

Once again there's the attempt to frame what I said as somehow being about the mere fact that you have or express a different view. Wouldn't that be fun to debate instead? Why, that would be so easy to knock out of the park, wouldn't it?

Three strikes, you're now being obtuse. Go back and reread, this time applying whatever comprehension and critical thinking skills you have to what I actually wrote. (Hint: part of it starts with "There's nothing wrong with contrary opinions...")

He was referring to total consumer debt as in consumer debt only. Really, the amount of debt you carry isn't a big deal unless you don't have the income to back it up. Luckily, Americans do have the income to back it up, as evidenced by the fact that the American consumer carries a debt burden the least costly to them since 1993. Interestingly, I don't remember the years following 1993 to be very bad times for the United States.

This is a typical response from a Keynesian follower. "Debt isn't bad unless you can pay it." I've heard this nonsense a million times, especially from professors, and I am so tired of it.

Debt is debt.

The idea is NOT to be in debt.

What are you going to say next, that WWII ended The Great Depression? That a recession is simply defined by unemployment alone?

I personally don't have a problem with opposing views. I think it's great to post $#@! like this.

I am jsut going after your comment and responding to how ridiculous it is.

I'm offering you an amortizing loan that, after taxes, will cost you 2.8%. The loan amount is $100,000, and it will amortize over the next 30 years. Do you take my offer?

If you're rational, you do. You realize that the cost of carry is negligible, virtually zero, in fact, and that you're getting all the time value in the world for mere pennies. Going into debt at today's low interest rates are perhaps the smartest thing you could ever do.

I don't understand how this can be sustained, but they've sustained it all these years so there's no reason for me to necessarily believe that this is the end. Heck, I thought the 2008 crash was the beginning of the end. I can't believe that hyper-inflation hasn't smacked us hard, yet. But it hasn't, so maybe it won't.

Just a perspective to add. remember the video on the "Morning Joe", where they had Ron Paul's quotes on the housing crash? The quotes date from 2003. That's 7-9 years after the dot-com bubble, and 5 years before the housing crash.

Once more into the fray...
Into the last good fight I'll ever know.
Live and die on this day...
Live and die on this day...

Well, it matters what it's for. If it's something I need, like a home for my family (which I doubt you can find for 100K), I would say no. I don't want 100,000 jsut to have 100K, even at 2.8%. That's stupid. Again, you seem to be promoting debt.

The only benefit I could see (maybe) is if you obtain a tax deductible because of it. And the only way I would accept that is if I truly SAVED money.

This is exactly the point I am trying to make. It seems as though Keynesians just say "hey, go get in debt, it's okay! Just look how great those rates are!!!" When, if I don't need it, why accept it?

I don't want to be a slave to anyone if I can help it.

And for you to imply that if I don't accept that, I am "irrational" is ridiculous.

jordan you need to be more specific. 2.8 percent a year? APR? EAR? you need to state whether or not the interest on the loan is tax deductible as well. the cost of carry is below inflation, so if you're talking about a fixed rate loan @ a cost thats less than inflation, its more advantageous than taking on debt at a rate thats higher than inflation without any tax benefits.

Originally Posted by Jordan

I'm offering you an amortizing loan that, after taxes, will cost you 2.8%. The loan amount is $100,000, and it will amortize over the next 30 years. Do you take my offer?

If you're rational, you do. You realize that the cost of carry is negligible, virtually zero, in fact, and that you're getting all the time value in the world for mere pennies. Going into debt at today's low interest rates are perhaps the smartest thing you could ever do.

Well, it matters what it's for. If it's something I need, like a home for my family (which I doubt you can find for 100K), I would say no. I don't want 100,000 jsut to have 100K, even at 2.8%. That's stupid. Again, you seem to be promoting debt.

The only benefit I could see (maybe) is if you obtain a tax deductible because of it. And the only way I would accept that is if I truly SAVED money.

This is exactly the point I am trying to make. It seems as though Keynesians just say "hey, go get in debt, it's okay! Just look how great those rates are!!!" When, if I don't need it, why accept it?

I don't want to be a slave to anyone if I can help it.

And for you to imply that if I don't accept that, I am "irrational" is ridiculous.

I'm sorry you see it as slavery. I see it as opportunity, as do many Americans. Debt is okay at these rates and assuming that you have the income to cover it. Rising consumer debt levels are not a concern, anyway, seeing as the total debt Americans hold is more manageable than their debt in 1994. We're a well financed country with ample cash flow to cover our liabilities.

Originally Posted by The Binghamton Patriot

jordan you need to be more specific. 2.8 percent a year? APR? EAR? you need to state whether or not the interest on the loan is tax deductible as well. the cost of carry is below inflation, so if you're talking about a fixed rate loan @ a cost thats less than inflation, its more advantageous than taking on debt at a rate thats higher than inflation without any tax benefits.

EAR after tax benefits. All in cost to you is 2.8%/year. But you're making this more complicated than it needs to be. Makes way more sense to borrow money today than at any point in history. And, let's be real here, if you're an inflationist, you should be grabbing every fixed rate loan you can find at today's interest rates. Debt isn't a problem, not at all.

The point of all this: Debt is inexpensive today. It's free if you're an inflationist. Therefore, you should not fear a rising level of debt. It is manageable, and the majority of it is fixed rate. The debt Americans hold today is not like the debt of 2006; it's not debt to a mortgage lender for a negative amortization loan on a bubblicious home with rates that could reset. Catastrophe was built into the system during the debt-fueled mortgage boom of the 2000s due to negative amortization loans and resets. Those are long gone. Debt today isn't relatable to debt in the mid-2000s, and it is much less costly than it was even in 1993. Debt is hardly a weak point for the American consumer.